THE FIRST 100 DAYS
Roosevelt entered office at a time when fear and panic had paralyzed
the nation. In a famous passage, historian Arthur Schlesinger described
the mood at FDR's inauguration: "It was now a matter of seeing whether
a representative democracy could conquer economic collapse. It was a matter
of staving off violence -- even, some though -- revolution."
FDR's natural air of confidence and optimism did much to reassure the
nation. His inauguration on March 4 occurred literally in the middle of
a terrifying bank panic -- hence the backdrop for his famous words: "The
only thing we have to fear is fear itself." The very next day, to
prevent a run on banks, he declared a "bank holiday," closing
all banks indefinitely until bankers and government could regain control
of the situation. The term "holiday" was meant to give a festive
air to what was actually a desperate situation, but such was FDR's desire
to provide hope to the nation.
Congress was almost entirely compliant and gave the President everything
he wanted. The Emergency Banking Bill, which strengthened, reorganized
and reopened the most solvent banks, was passed overwhelmingly by Congress
with little debate. On March 12, Roosevelt announced that the soundest
banks would reopen. On March 13, deposits at those banks exceeded withdrawals
-- a tremendous relief to a worried nation. "Capitalism was saved
in eight days," said Raymond Moley, a member of the President's Brain
The bank holiday was a vivid example of the effectiveness of government
intervention in an economic crisis. Hoover had allowed two previous bank
panics to run their course, which contributed to over 10,000 bank failures
and $2 billion in lost deposits. The bank holiday secured Roosevelt's political
reputation, and convinced both Congress and the public that the New Deal
was the right road to follow.
Roosevelt's strategy consisted of two parts: first, provide relief
for those who needed it most, which often involved a redistribution of
wealth from the rich to the poor. Second, provide long-lasting reform to
the nation's economy, through reorganization and the creation of new agencies.
Most of Roosevelt's policies can be described as "taking from one
pocket to put in the other." Fixated with a balanced budget, and fretful
when it was not, Roosevelt made sure that anything given to one sector
of the economy was taken from somewhere else. He did not accept Keynes'
recommendation to begin heavy deficit spending, and did not do so until
the threat of World War II forced him to.
Roosevelt's legendary "First 100 Days" concentrated on the
first part of his strategy: immediate relief. From March 9 to June 16,
1933, FDR sent Congress a record number of bills, all of which passed easily.
These included the creation of the Federal Emergency Relief Administration,
the Civilian Conservation Corps, the Reconstruction Finance Corporation,
and the Tennessee Valley Authority. Congress also gave the Federal Trade
Commission broad new regulatory powers, and provided mortgage relief to
millions of farmers and homeowners.
The success of the First 100 Days was important, because it got the
New Deal off to a strong and early start. Later, the conservative Supreme
Court would declare much of the New Deal unconstitutional, and Roosevelt's
political prestige would decline as his policies failed to resolve the
Depression. If Roosevelt had not passed his agenda early, we would probably
be without many New Deal programs we take for granted today.
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